Green Deal scheme shut down after households grab all £120m of energy efficiency handouts in just six weeks

The Government last night unexpectedly shut down a £120million scheme set up to help households make their homes more energy efficient after strong demand meant funds were exhausted in just six weeks.

The decision came as a surprise because ministers had announced on Tuesday that the subsidies - which pay for energy efficiency measures in homes - would be trimmed, but not ended, from today.

At that stage just £50million of vouchers had been allocated, but a rush in the two days since then has seen the remainder of the £120million pot snapped up. All the money has been applied for by residents but some may choose not to go through with their measures, meaning some of the fund may become available again.

Energy efficiency: New boilers were included in the home improvements customers could claim cashback for under the Green Deal

However, any extension of the £120million limit will depend on future spending decisions by the Government.

Under the ‘second phase’ Green Deal Home
Improvement Fund, which opened to applications on June 9, homeowners
could claim up to £7,600 cashback to improve their home’s energy
efficiency. This included gas boilers, double glazing, and insulation
and replacement doors.

Funds were supposed to be cut by £2,000 to £5,600 today. But last night ministers announced that ‘due to overwhelming demand’ applications the GDHF had closed with immediate effect.

It said: ‘A surge in applications over the last two days means the allocated budget has now been reached.'

However, ministers said all applications received prior to the fund closing would be honoured at the original rates.

The scheme is part of a £540million three year energy efficiency package to make Britain’s homes and public buildings more energy efficient which was announced in December last year.

Amber Rudd, under secretary for Energy & Climate Change, said: ‘The Green Deal Home Improvement Fund is a world first and in a short space of time it has proved extremely popular.

‘We were always clear there was a budget which is why we encouraged people to act quickly.

‘As a result, thousands more families will now benefit from Government help to have warmer homes which use less energy.’

Neil Schofield, head of government
and external affairs at home appliances manufacturer Worcester, Bosch
Group, said the decision to stop the scheme displayed a shocking
inability to demand forecast and a total lack of understanding of the
dynamics of the heating industry.

'The tragedy is that, for once, DECC has come up with a scheme
that works. Consumers understood it, manufacturers could get behind it
and installers could sell it.

'Instead of embracing its success and saying “let’s do some more” and
really make a difference to the UK’s ageing housing stock, the new
Energy Minister, who has only been on post for two days, has closed it.
It’s a body blow and a triumph for short-termism,' Schofield said.

The second phase of the Green Deal launched in June, which offered cashback to households, replaced the first phase, a loan scheme, which did not prove popular and was criticised for being too complicated.

People interested in improving the energy efficiency of their homes can receive updates about any possible future schemes by emailing gdhif@decc.gsi.gov.uk or call the Energy Saving Advice Service on 0300 123 1234.